Daily Nugget – India’s gold prices see biggest ever rise
Comex gold futures climbed for a third consecutive week this week despite positive economic data from the US. Consumer confidence jumped to 81.5, higher than the expected 79. The positivity comes thanks to rising house prices and income expectations.
However this news wasn’t enough to dampen both gold and silver’s climbs.
One definition of a bull market is a climb of 20%, yesterday gold took on that challenge and the spot price climbed 19%. Overnight bullion for immediate delivery in Singapore touched $1,433.
Gold for December delivery reached its highest since May 14th yesterday, as it touched $1,434/oz. The yellow metal appears to be struggling to maintain momentum above $1,425 as it did in May/June.
Everyone was talking about gold yesterday but the real star of the show was the silver price. Silver futures climbed to a four-month high and are currently 30% above their June lows. Commerzbank said yesterday that the expect silver to ‘run out of steam’ between $24.79 and $25.24.To read more about what this year has in store for silver, read here.
Currently tensions surrounding Syria are being blamed for the climb in the gold price as investors seek safe havens. Events surrounding the country remain fraught as politicians meet to discuss potential next steps. US Secretary of State, John Kerry said yesterday that Syria would be made accountable for its actions. Both US Treasuries and precious metals have jumped.
Debt ceiling next catalyst for gold bullion?
Tomorrow both the St Louis Fed and the Richmond Fed presidents will be giving speeches tomorrow both of these will be watched closely for hints regarding both tapering and the looming debt ceiling.
Should Syria (somehow) lose the interest of politicians and journalists another catalyst for gold is waiting in the side-lines – the US debt ceiling. Treasury Secretary Jacob Lew said on Monday that the US will hit the debt-ceiling by mid-October, a surprise to some who had thought this wouldn’t happen until November.
Gold price fails festival season test
Gold prices in India saw their biggest ever single day surge today as they increased by Rs 2,500, following the rupee falling to a historic low against the US dollar.
The President of the All India Gems & Jewellery Trade Federation said yesterday that he wasn’t feeling too optimistic about gold sales during festival season, given the significant difference in price between the domestic and international gold price. He expects little or no gold to be imported in August thanks to the weakening rupee which has crashed following concerns over the oil price.
Banks underpin gold price
Gold and silver are both clearly making gains thanks to uncertainties surrounding both Syria and the US debt ceiling. However it is the central banks’ demand for gold bullion reserves which will underpin and support the gold price for the foreseeable future. Yesterday it was announced that both Russia and Turkey have added to their gold reserves, the former’s reaching over 1,000 tons.